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RU64 confusion blamed for NU pension slump

Norwich Union has blamed much of its 15 per cent first-quarter slump in pension sales on continuing confusion over the FSA’s RU64 requirements.

UK chief executive Gary Withers says NU has repeatedly asked the regulator to set out its position in an official missive but the FSA has not officially followed up its January comments that the controversial regulation no longer applies.

Withers says this clarification has been a driver behind a clamour for 1 per cent stakeholder products, a market NU has effectively left, before the price cap rise last month.

Individual pension business fell to 831m from 996m in the same period last year. However, commission cuts by NU did result in a 9 per cent increase in profit margins.

Aviva’s total global sales were up 17 by per cent. Within the UK product range, total bond sales rose by 21 per cent to 577m from 477m, with unit-linked bonds up by 37 per cent.

Collective investment sales fell by 17 per cent from 252m to 209m, which Withers blames on investor concerns over the direction of the market and increased bond sales. Annuity sales were up 51 per cent from 273m to 413m.

Withers says: “There is confusion in the marketplace because the FSA said RU64 no longer applies, at the start of the year, but now at the end of April it has still not clarified its position with a missive.”

Richard Jacobs Pension & Trustee Services managing director Richard Jacobs says: “We use NU for group stakeholder and believe me there was no rush. The weakness of NU’s admin is a major reason behind the slump.”

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